IRS Changes for 2016

The IRS just issued Rev Proc 2015-53 which adjusts various items for inflation for 2016.

INDIVIDUAL TAX RATES

The individual income tax rate of 39.6% now applies for single taxpayers with income above $415,050 (up from $413,200) and $466,950 for married taxpayers filing a joint return (increased from $464,850).

The standard deduction for heads of households is increased to $9,300 (increased from $9,250). The other standard deduction amounts for 2016 are unchanged at 6,300 for singles and married persons filing separate returns, and $12,600 for married couples filing jointly.

The limitation for itemized deductions in tax year 2016 begins with incomes of $259,400 or more ($311,300 for married couples filing jointly).

The personal exemption amount moves from $4,000 in 2015 to $4,050 in 2016. The exemption is subject to a phase-out that begins in 2016 with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly) and phases out completely at $381,900 ($433,800 for married couples filing jointly.)

The alternative minimum tax (AMT) exemption amount for tax year 2016 is $53,900 ($83,800 for married couples filing jointly). The 2015 exemption amount was $53,600 ($83,400 for married couples filing jointly).

ESTATE AND GIFT RATES

Estates of decedents who die during 2016 have an exclusion amount of $5,450,000 (increased from $5,430,000 in 2015).

Contact Our Firm

Sweeney Legal, LLC, provides legal, practical, and business counsel to Seniors, families, and businesses in the Fairfield, Connecticut area, including the communities of Bridgeport, Bethel, Brookfield, Danbury, Darien, Easton, Fairfield, New Canaan, Newtown, Norwalk, Redding, Ridgefield, Stamford, Weston, Westport and Wilton. John is also licensed in New York serving Westchester County including the towns of Bedford, Lewisboro, Mount Kisco, North Salem, Pound Ridge, and Somers.